Should Hawaii Own Oahu’s Only Slaughterhouse?

“It’s a great way of life and culture,” said Kualoa Ranch president and co-owner John Morgan, whose family has been raising cattle for nearly a century and a half. “In Hawaii, it’s one of the defining industries that gives us a keen sense of where we came from.”

But today one part of the industry on Oahu is deeply troubled and the state is weighing stepping in and spending $1.6 million of the public’s money to take over the only slaughterhouse on the island.

Alan Gottlieb and fellow ranchers like Morgan are backing Senate Bill 249, which has passed the House and Senate and is in conference committee.

“To us, it just makes more sense to help the livestock industry, rather than just let it go bankrupt,” said Gottlieb, who’s also the Hawaii Cattlemen’s Council government affairs chair. “We know it’s having trouble financially, but this investment now, will be worth it in the end.”

However others are much more skeptical, questioning why the state should step in to rescue a private business that can’t make it on its own.

Kapolei Plant Mostly Slaughters Hogs

The Hawaii Livestock Cooperative owns the 7-year-old plant in Kapolei, which sits on 6.5 acres of state land. Its main use is to process about 900 hogs a month that mostly originate from the mainland and are sold in Chinatown and other food markets.

The main source of cattle for the plant, a dairy, went out of business in 2002, two years before the slaughterhouse opened.

“We needed the dairy industry to survive here and it didn’t, so we suffered from it, as it put a huge dent on our bottom line,” Hawaii Livestock Coop general manager Leonard Oshiro told Civil Beat.

Oshiro feels the state investment is all about saving an industry for future generations.

“Everybody has their own priorities,” Oshiro said. “We’re here because of the industry and I think lawmakers are realizing the industry needs help to grow and survive. We talk about agriculture and being self-sufficient, well, we’re part of that. We can’t constantly be shipping food. Plus, a few ranchers on Oahu have told us, they may send us more of their cattle.”

Oshiro said in order for the state-of-the-art slaughterhouse to survive, it needs the state funding.

“We’re in $600,000 debt to the state,” he said. “We looked at paying off the $600,000 and then with the million left, we’ll fund any necessary capital improvements and put in a photovoltaic system. This would cut one of my higher costs, which is the electric bill. We pay about $6,000 a month on that and it‘s going to keep going up, so the solar panel system will pay for itself in the long run. It‘s an investment.”

Oshiro said the plan would be for the state to hold ownership and then lease the plant to the highest bidder, or the entity most capable of running it.

“If it’s us, it’s us,” he said. “We’ll save it for our industry. If the state didn’t step in, we’d have to make more payments, we’d probably go bankrupt.”

Lawmakers Mostly in Support

State Sen. Donovan Dela Cruz, a member of the agriculture committee, is a co-author of the bill.

“If we don’t do something soon, we’re at the risk of losing our livestock industry,” he told Civil Beat. “We‘re talking about an industry that could die.”

When asked why the state should invest in a slaughterhouse, as opposed to any other industry, Dela Cruz said, “The time is now to do this, the opportunity is there. They need our help right away.”

State Rep. Corinne Ching, founder of the Hawaii Heritage Caucus, which has the mission to identify, protect and preserve the state’s cultural resources, supports SB249 as well.

“The primary reason is the step in the right direction for being sustainable,” she told Civil Beat. “Why now? I think you can get people to improve on it. We may lose this opportunity.”

Asked about spending taxpayer money during a fiscal crisis for a slaughterhouse that’s failing financially, Ching replied, “It’s a long-term decision and you have to make sacrifices. Should something happen here, where we cannot get shipments in, we need to be more self-sufficient. There’s always going to be an argument, now we have the opportunity to take care of this. It’s a confident, bold step of sustainability.”

Some Lawmakers, Groups Disagree

Ching’s colleague in the State House, Rep. Tom Brower, feels it’s a bold step as well.

But in the wrong direction.

“I think there are good intentions for continuing to have one on Oahu, but since it was not making it in the private sector, I’m not sure if the state should jump in,” he told Civil Beat. “The state shouldn’t be getting involved with something the private sector can’t take care of. We also have neighbor island slaughterhouses, so for now, that may have to help.”

State Sen. Mike Gabbard is a lone ranger when it comes to voting against SB 249 in the Senate. His was the sole no vote.

“Given our budget crisis, the last thing our state should be doing is buying a slaughterhouse,” he told Civil Beat. “We’ve just got to be more careful. We should be putting that $1.6 million into worthy causes, like schools, instead of raising the GET or cutting basic services. If we do invest this funding, we’re going to have to keep investing. Look at the track record. If it was a thriving business, not so much in the hole, then maybe, but it just doesn’t make any sense to me.”

The “Oahu Slaughterhouse” bill also doesn’t make any sense to organizations like Animal Advocate Inc., Animal Rights Hawaii, PETA and other national organizations. It has sparked so much interest that a few weeks ago it jammed up the email system at the Capitol.

“No other state owns slaughterhouses,” Animal Rights Hawaii President Cathy Goegell said in an email. “With so many public services being cut, the last place we should be spending taxpayer dollars is on acquiring an unnecessary slaughterhouse.”

Mark Fergusson, CEO of Hawaii’s all-vegetarian, organic and natural food chain store, Down To Earth, agrees with Goegell. Fergusson points out “it’s interesting that in testimony to the Legislature, even the cattle industry states that the slaughterhouse is not needed for the beef industry, even though the preamble to the bill states the purpose is to benefit the beef industry.”

For example, the Hawaii Cattlemen’s Council said in its testimony:

“Even if all of the Oahu cattle were kept in-state, there would still be a fairly small amount of cattle for this facility…”
“Current practices of shipping calves to the Mainland have been done for economic reasons, not for lack of infrastructure.”
“Ultimately, if we can create a statewide network for a branded, high specification island grass finished beef, facilities such as the Oahu slaughterhouse will play an integral role in the network. Perhaps at that time, slaughter may be a small part of what that facility does for the cattle industry, but perhaps that facility may, for example, do all of the state’s value added processing. These are some of the elements that will be discussed in the coming months as we go county to county working on our Cattle Industry Master Plan…”

The Hawaii Farm Bureau wrote in its testimony:

“Our understanding is that at the present time, the facility is used mainly for pork processing but that it may also be useful for beef processing in the future.”
“We hope that this bill will at least lead to further discussion on the situation and its potential resolution.”

“In other words, according to the farmers’ testimony, this slaughterhouse ‘may’ be useful ‘in the future’ if a large number of unknowns occur,” Fergusson told Civil Beat in an email. “Taxpayer funds should not be used for something so uncertain.”

State Ag Dept. Supports Bill

State Department of Agriculture spokesperson Janelle Saneishi told Civil Beat that if the department can help the slaughterhouse with the $1.6 million appropriated by the Legislature, it will keep the plant running as a viable business.

“They’re carrying so much load and expenses,” she said. “If they come through this time, our goal is to keep that slaughterhouse open, because without it, it threatens the future of the industry.”

Saneishi said if the plant shuts down, the cost to bring it back would be between $8 million and $9 million.

“It’s important to preserve our livestock industry and Oahu has the market,” she said. “There’s some talk about establishing another dairy on Oahu and in order to sustain that kind of operation, we need that slaughterhouse. Without it, it’s a problem. People are interested in doing sheep and goat. If they choose to do nothing, the coop goes bankrupt, and the state may not get it back.”

Saneishi said the highest bidder may just dismantle it and state may bid again and spend even more money to acquire it.

“Economically, it’s best for the state to take over,” she said. “In the long run, it may save us more money.”

While the Department of Agriculture supports SB249, Gov. Neil Abercrombie still remains undecided. According to his press secretary, Donalyn Dela Cruz, the governor hasn’t taken a position on this issue yet and “will need time to review it after a final draft is done.”

Statewide Perspective

Currently, there are USDA-approved slaughterhouses on the neighbor islands: three on Kauai, two on the Big Island and Maui and one on Molokai.

But some ranchers Civil Beat spoke to on the outer islands said it just costs too much money to ship, so the benefit of an Oahu slaughterhouse staying open would be minimal.

Kauai ranchers are hoping to get funding from the county and state for an islandwide plant that could be shared by all. The Big Island also has similar plans to build another slaughterhouse. For now, most of the neighbor island cattle is shipped to the mainland as well.

A National Perspective

Hawaii is not alone in its lack of meat processing centers. Nationally, the number of slaughterhouses has declined steadily for the past three decades.

The American Association of Meat Processors, North America’s largest meat trade organization, told Civil Beat that consolidation is a natural trend.

“We’re seeing more and more consolidation,” AAMP executive director Jay Wenther said. “It’s the natural flow of people just getting out of the business. That’s going to continue to occur, with more going out than coming in to the business.”

Wenther told Civil Beat he’s never heard of a state buying a slaughterhouse or meat packing plant.

“Prisons would be the only place where the state owns a slaughterhouse to feed prisoners or even a lot of universities have them too, but that deals with the education-part of the institution.”

Wenther said he doesn’t have a position on SB 249 because he doesn’t know enough about the entire situation.

“All I know is that we’ve been declining in slaughterhouses and meat processors,” he said. “It’s an aging environment and culture, people don’t come out of high school saying they want to be in that industry, wanting to be in $2 million in debt, most of the time it’s transferred from family member to family member. If you look at the business of livestock, it’s a young man’s game, not a high-profit margin and they’re getting more specialized and looking at specific segments.”

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